Yoshitsu Co., Ltd. Announces Pricing of $4.0 Million Registered Direct Offering and Private Placement
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The issuance of American Depositary Shares (ADSs) by Yoshitsu Co., Ltd. to institutional investors at a price of $0.67 per ADS represents a significant capital infusion for the company. The generated capital of approximately $4,000,000, although modest relative to the broader market, is crucial for a company operating in the competitive retail and wholesale sectors. The concurrent private placement of ADS purchase warrants, exercisable immediately and expiring in 5.5 years, suggests a strategic move to not only secure immediate funding but also to potentially benefit from future appreciation in the company's value.
The impact on Yoshitsu's stock could be two-fold: short-term dilution of existing shares might lead to a decrease in share price due to the increased number of shares outstanding. However, the capital raised could enable strategic investments in inventory, expansion, or debt reduction, which could enhance the company's long-term market position. The role of Maxim Group LLC as the sole placement agent indicates a targeted approach to the capital raise, potentially minimizing the costs associated with the offering.
It is essential to consider the offering price in relation to the current market price of Yoshitsu's ADSs. If the offering price is at a significant discount, it might indicate a lack of confidence from institutional investors or a need for fast liquidity. Conversely, a price close to the market value could suggest investor confidence in the company's prospects.
Yoshitsu's operation across diverse geographic regions including Hong Kong, mainland China, Japan, North America and the United Kingdom, positions it in a complex market environment. The retail and wholesale distribution of Japanese beauty and health products, among others, is a niche but growing market. With the rise of global interest in Japanese culture and products, Yoshitsu's expansion capital could be leveraged to enhance its distribution networks, improve its e-commerce capabilities, or diversify its product offerings to meet evolving consumer demands.
Consumer trends in the beauty and health industry show a shift towards products with natural ingredients and sustainable packaging, which Yoshitsu could capitalize on. The additional funds might also allow for strategic partnerships or acquisitions, particularly in regions where the company seeks to strengthen its presence. It is crucial to analyze how Yoshitsu intends to allocate the raised funds, as this will significantly impact its ability to compete and grow in a highly saturated market.
From a legal perspective, the offering's structure as a registered direct offering with a concurrent private placement is notable. This approach allows Yoshitsu to streamline the capital-raising process by directly approaching institutional investors rather than conducting a public offering. However, the issuance of warrants in a private placement necessitates careful compliance with securities regulations to ensure proper disclosures and adherence to exemption requirements. The terms of the warrants, including the exercise price and expiration, must be explicitly stated and fair to both Yoshitsu and the investors to avoid future disputes.
Additionally, the company must ensure that all offering expenses and placement agent fees are transparently accounted for to maintain investor trust and avoid any legal complications that might arise from miscommunication or misrepresentation of the offering's terms.
Tokyo, Japan, Jan. 26, 2024 (GLOBE NEWSWIRE) -- Yoshitsu Co., Ltd (“Yoshitsu” or the “Company”) (Nasdaq: TKLF), a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, as well as other products in Hong Kong, mainland China, Japan, North America, and the United Kingdom, today announced that it has entered into securities purchase agreements with certain institutional investors providing for the issuance of 5,970,152 American Depositary Shares (“ADSs”), at a purchase price of
Maxim Group LLC is acting as the sole placement agent in connection with the offering.
The gross proceeds to Yoshitsu Co., Ltd. are estimated to be
The offering is being made pursuant to an effective shelf registration statement on Form F-3 (File No. 333-274076) previously filed with the U.S. Securities and Exchange Commission ("SEC"), which was declared effective on September 8, 2023. The securities may be offered only by means of the prospectus supplement and the accompanying prospectus that form a part of the registration statement. Copies of the final prospectus supplement and accompanying prospectus relating to the registered direct offering may be obtained, when available, by contacting Maxim Group LLC, at 300 Park Avenue, 16th Floor, New York, NY 10022, Attention: Prospectus Department, or by telephone at (212) 895-3745 or by email at syndicate@maximgrp.com. A final prospectus supplement related to the offering will be filed with the SEC and will be available free of charge by visiting EDGAR on the SEC's website at www.sec.gov.
This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.
About Yoshitsu Co., Ltd.
Headquartered in Tokyo, Japan, Yoshitsu Co., Ltd is a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, as well as other products in Hong Kong, mainland China, Japan, North America, and the United Kingdom. The Company offers various beauty products (including cosmetics, skincare, fragrance, and body care products), health products (including over-the-counter drugs, nutritional supplements, and medical supplies and devices), sundry products (including home goods), luxury products (including branded watches, perfume, handbags, clothes, and jewelry), electronic products (including entertainment gaming products), and other products (including food and alcoholic beverages). The Company currently sells its products through directly-operated physical stores, through online stores, and to franchise stores and wholesale customers. For more information, please visit the Company's website at https://www.ystbek.co.jp/irlibrary/.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. In addition, there is uncertainty about the further spread of the COVID-19 virus, or the occurrence of another wave of cases, and the impact it may have on the Company's operations, the demand for the Company's products, global supply chains, and economic activity in general. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission.
For more information, please contact:
Yoshitsu Co., Ltd
Investor Relations Department
Email: ir@ystbek.co.jp
Ascent Investor Relations LLC
Tina Xiao
President
Phone: 1-646-932-7242
Email: investors@ascent-ir.com
FAQ
What is the purchase price of the ADS in the offering?
How many ADSs are being issued in the offering?
What is the aggregate gross proceeds of the offering?
Who is acting as the sole placement agent in connection with the offering?
What is the expiration period for the ADS purchase warrants?
